Backtesting.py
Backtesting
Backtesting is like testing a strategy in a video game, but instead of trying it out in a live game, you rewind time and see how well it would have worked in past games. In finance, it means you take a trading strategy (like when to buy or sell stocks) and check how it would have performed using historical data. If it worked well in the past, you might feel more confident using it in the future. If it didn’t, you might adjust or scrap the strategy.
Python
Backtesting.py is a python framework that helps you test trading strategies. It’s popular because it’s powerful but so easy it can learned in one afternoon.
With backtesting.py you can:
- Create Strategies: Define your buy/sell logic in python.
- Run Simulations: Apply your strategy to historical data to see how it would have behaved.
- Analyze Results: View performance metrics like profit, drawdowns, and other statistics.
- Visualize: Plot the results.
Improved upon the vision of Backtrader, and by all means surpassingly comparable to other accessible alternatives, Backtesting.py is lightweight, fast, user-friendly, intuitive, interactive, intelligent and, hopefully, future-proof. It is also documented well, including a handful of tutorials.
YouTube
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